It’s certainly the case that the richest people didn’t get there by making dumb money moves. But does their wealth really suggest they’re smarter than the rest of us?
One researcher says yes. Jonathan Wai at Duke University has conducted a study that claims “the top one percent in wealth highly overlaps with the top one percent in brains,” CNBC says.
Neither CNBC nor Business Insider, which got to see the research, explains its exact methodology. Both say the study measures cognitive ability by attendance at elite colleges. In other words, it defines “smartest” as being a former student of one of the 29 schools Wai thinks admit the smartest people. That’s a flawed shortcut. Although prestigious schools tend to admit students with the best test scores, there are other factors in admissions, such as athletic ability and family alumni.
But it’s a subject Wai has written about before more than once, and the findings are interesting. According to the study, about 45 percent of billionaires rank in Wai’s top percent of cognitive ability — adding a new dimension to Occupy Wall Street’s derisive “The One Percent.”
In comparison, only 41 percent of U.S. senators and federal judges, 38.6 percent of Fortune 500 CEOs, and 21 percent of House representatives were in the “top percent” of cognitive ability.
Where the money came from can also indicate intelligence level, the study says. Sixty-nine percent of people who made their billions from investments and 63 percent who did so from technology were in the top percent. Among those who got rich from fashion and retail, the numbers were just 25 percent and 23 percent, respectively.
A previous study done in 2007 by Ohio State University researcher Jay Zagorsky came to a different conclusion: IQ has no clear relationship to wealth. Zagorsky’s research collected financial information from more than 7,500 people and had them take a military intelligence test. Who’s right? Maybe we should ask both researchers about their net worth.